INDEX:

I. Market News: Market Slips After Recent Records
II. Heroes: Chart Inds., NPC, Gandalf, Gemstar, Asyst
III. Goats: Rhodes, Circuit City, MSB Bancorp
IV. Investment News: Merger News Dominates
V. Calendar: Tuesday's Economic Events

MARKET CLOSE

DJIA: 4814.01, down 11.56
S&P 500: 588.46, down 2.11
NASDAQ: 1062.14, down 3.52

MARKET NEWS

After spending all day relatively flat, the market sold off late today on moderate volume. All eyes continue to be on Capitol Hill as the politicians preen and splutter and do nothing about the debate regarding the budget and the debt ceiling. Do you think a good wood-shedding would straighten these clowns out?

HEROES

Chart Industries <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:CTI)") else Response.Write("(NYSE:CTI)") end if %> soared $3/4 to $8 1/4 on strong third-quarter earnings. CTI posted earnings per share of $0.20 versus $0.03 in the year-ago period. Chairman and CEO Arthur S. Holmes attributed the strong results, Chart's fifth consecutive solid quarter, to "very strong market demand. . . for most of Chart's business areas. In particular, we have enjoyed brisk sales of stainless steel tubing and excellent order activity for our cyrogenic components and systems." The Eastlake, Ohio company manufactures standard and custom-built industrial process equipment primarily for low temperature and cyrogenic applications.

NPC International <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:NPCI)") else Response.Write("(NASDAQ:NPCI)") end if %> launched ahead $2 to $8 1/4 after the board of directors announced its intention to evaluate a proposal submitted by a management group led by Chairman and CEO O. Gene Bicknell for a merger whereby the management group's company would buy all the stock it doesn't currently hold for $9.00 a share. NPC is the world's largest Pizza Hut franchisee, operating 372 Pizza Hut restaurants and delivery stores in eleven states, 116 Skipper's quick service seafood restaurants, and 171 Tony Roma's restaurants.

Gandalf Technologies <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:GANDF)") else Response.Write("(NASDAQ:GANDF)") end if %> jumped $1 13/64 to $6 29/64 after announcing partnerships with Ingram Micro Inc. and Tech Data Corp., both leading distributors of personal computer and networking products. With the new agreements, Gandalf can now market its ISDN remote access and concentration products to more than 50,000 value-added resellers and retail dealers across America. "Gandalf provides leading solutions in network infrastructure by connecting remote locations to central resources and designing and supplying high speed backbones for data, video and voice transmission."

Gemstar International <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:GMSTF)") else Response.Write("(NASDAQ:GMSTF)") end if %> leaped ahead $6 7/8 to $31 3/4 after an Alex. Brown analyst initiated coverage of the stock with a "strong buy" rating. Gemstar came public in mid-October at $12 per share. The company develops, markets and licenses proprietary technologies and systems that simplify and enhance the viewing and recording of video and television programming.

Asyst Technologies <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:ASYT)") else Response.Write("(NASDAQ:ASYT)") end if %> tacked on $5 3/4 to $50 1/4 after announcing stellar second-quarter fiscal 1996 earnings. The company reported earnings of $0.50 per share versus last year's $0.17 in the same quarter. The consensus estimate was for $0.46 per share. Asyst is the leading supplier of mini-environment and automation systems to the worldwide semiconductor industry.

GOATS

Rhodes, Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:RHD)") else Response.Write("(NYSE:RHD)") end if %> plunged $1 to $10 after announcing disappointing October same-store sales. Total booked sales decreased 0.3% to $32.5 million for October, but same-store sales fell 6.8%. What really hurt the furniture retailer is the announcement that next quarter's earnings are expected to fall significantly below last year's comparable quarter.

Circuit City <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:CC)") else Response.Write("(NYSE:CC)") end if %> shed $2 1/4 to $30 1/2, also after reporting weaker October same-store sales. While Circuit City's total sales for the month increased 26% from $418 million to $528 million, same-store sales actually declined by 1%. Where are all those sales spurred on by Windows 95?

MSB Bancorp <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:MSBB)") else Response.Write("(NASDAQ:MSBB)") end if %> plummeted $4 1/4 to $23 after Hubco Inc. president and CEO Kenneth Nielson announced Friday that MSB rejected Hubco's $35-per-share bid. MSB wants to remain a community bank and grow through acquisitions. Nielson did not comment on what Hubco's response to the rejected bid would be. MSBB stock rose over $5 per share on Friday before it was halted at $24 1/4 for the news.

INVESTING NEWS: Merger Mania Dominates Today's Headlines

It's as if all the CEOs and Boards of Directors conspired to unleash their merger news together, just to see how the market would react. No less than seven merger stories broke (or were updated) today. Let's get to them:

Compaq Computer <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:CPQ)") else Response.Write("(NYSE:CPQ)") end if %> announced that it has reached a definitive agreement to acquire NetWorth, Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:NWTH)") else Response.Write("(NASDAQ:NWTH)") end if %>. Compaq has offered $42 per share in cash for all the outstanding shares of NetWorth, a deal valued at approximately $372 million. The deal comes just three weeks after Compaq announced a deal to acquire Thomas-Conrad. The acquisitions are part of Compaq's strategy to deliver a complete line of inter-networking products. Compaq dropped $1 7/8 to $54 5/8 and NetWorth climbed $6 7/8 to $41 3/8 on the news.

Our second deal is between Sherwin-Williams <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:SHW)") else Response.Write("(NYSE:SHW)") end if %> and Pratt & Lambert United <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:PLU)") else Response.Write("(NYSE:PLU)") end if %>. Sherwin-Williams will acquire all of the outstanding shares of PLU for roughly $400 million ($35 a share). Sherwin-Williams also reached an agreement with a group of shareholders who control roughly 40 percent of PLU common stock. They've granted Sherwin-Williams an option to purchase their holdings for $35 per share as well. Pratt & Lambert is principally engaged in the development, production and sale of coatings and adhesives to the dealer, mass merchandiser, home center and specialty markets. On the news, Pratt & Lambert shares screamed ahead $13 7/8 to $34 5/8 while Sherwin-Williams dropped $1/8 to $37 1/2.

Deal number three involves DJIA component International Paper <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:IP)") else Response.Write("(NYSE:IP)") end if %> and cup maker Federal Paper Board <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:FBO)") else Response.Write("(NYSE:FBO)") end if %>. The two companies have agreed to merge in a deal valuing FBO stock at $55 per share, or approximately $3.5 billion. (Federal Paper Board shareholders have the option of either cash or IP stock.) CNBC's David Faber reported some unusual options activity last week surrounding the rumored buyout, and now that the deal has been announced, the SEC is taking a close look at the options play. Investors everywhere are streaking to their SEC guidebooks to re-read that definition of "material information." Shares of Federal Paper Board soared $6 1/2 to $52 while International Paper slipped $1 to $36 1/8.

Fourth in line is a previously announced deal with a new twist. Wells Fargo's <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WFC)") else Response.Write("(NYSE: WFC)") end if %> mid-October hostile bid for First Interstate <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:I)") else Response.Write("(NYSE:I)") end if %> was thwarted somewhat today when First Interstate announced it has reached a preliminary agreement to merge with First Bank System <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:FBS)") else Response.Write("(NYSE:FBS)") end if %>. Today's announced merger is for 2.6 First Bank shares per First Interstate share, valuing First Interstate's shares at roughly $132 each as of Friday's close. Wells Fargo is expected to sweeten its offer, however. In recent talks between Wells Fargo and First Interstate, Wells Fargo chairman Paul Hazen reportedly offered to increase Wells Fargo's bid to 0.65 shares of WFC for each share of First Interstate, boosting the offer to approximately $150 per share. Do you get the feeling this one's not over? First Interstate slipped $7/8 to $126 7/8, First Bank System closed down $1 to $49 7/8, and Wells Fargo lost $1 5/8 to $210 5/8.

Our fifth merger turned from hostile to friendly today when Cordis Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:CORD)") else Response.Write("(NASDAQ:CORD)") end if %> and Johnson & Johnson <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:JNJ)") else Response.Write("(NYSE:JNJ)") end if %> agreed in principle to a $109-per-share stock-for-stock deal. With Cordis's 17.6 million outstanding shares, the deal is worth approximately $1.9 billion. The original offer from JNJ was for either $100 per share in cash or $105 in stock. Cordis rejected both offers before agreeing to today's announced terms. Most healthcare analysts see the merger as an ideal marriage of the two companies' interventional cardiology businesses. Cordis closed the day down $5 3/8 to $105 1/4 and Johnson & Johnson shed $1/8 to $80 1/8.

Deal number six in our lineup concerns an ongoing hostile tender offer by Moore Corp. Ltd. (Toronto:MCL) for the outstanding shares of Wallace Computer Services <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:WCS)") else Response.Write("(NYSE:WCS)") end if %>. Moore announced that its tender offer of $60 per share has been accepted by a "compelling majority" of Wallace shareholders, despite Wallace's pleas to its shareholders to reject the tender offer. Analyst Benoit Chotard of Research Capital Corp in Montreal argued that Wallace "will have no choice but to negotiate" in light of the 74% of shareholders who have accepted the tender offer. Moore needs 80% of Wallace's shares to get around Wallace's poison pill defense at the December shareholders' meeting. Illinois-based Wallace is one of the largest United States manufacturers and distributors of information products, services and solutions. It closed up $7/8 to $58 3/4 on the announcement.

Our final merger story is the agreement between Marquette Electronics <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:MARQA)") else Response.Write("(NASDAQ:MARQA)") end if %> and E for M Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:EFMC)") else Response.Write("(NASDAQ:EFMC)") end if %>. The two companies signed a definitive agreement where Marquette will acquire EFMC shares through a cash tender offer of $12 per share. Marquette believes the acquisition will be accretive to earnings right from the beginning as it brings together complementary product lines serving the worldwide cardiology, patient monitoring and information systems markets. Combined sales for the new company should exceed $500 million annually. E for M shares climbed $2 3/8 to $11 5/8 and Marquette added $1 to $18 3/4 on the news.

CALENDAR: Tuesday's Economic Events

---September Consumer Installment Credit (2:00)
---3Q '95 Productivity and Costs (Preliminary)
---September Wholesale Trade

Byline: Befumo/Sheard (MF Templar/MF DowMan)